Atlantic Coast Pipeline Necessity and the FERC

by James C. Sherlock

Peter Galuszka’s piece earlier today in this space made two claims the greens offer endlessly trying to achieve what I call truth by repeated assertion:

  1. The Federal Energy Regulatory Commission (FERC) either did not review or did not review properly (he inferred both) the wisdom and necessity for natural gas pipeline projects in general and the Atlantic Coast Pipeline (ACP) in particular.
  2. That if it had done so, the FERC would have discovered that there is no market for additional natural gas in the markets to which the pipelines would have brought it.

These claims appear from the usual sources every time any discussion of the ACP is had on this blog. They are both false. I hope this is the last time we will need to read about them.

Mr. Galuszka clearly did not understand the facts.

He wrote:

“So Dominion and its partners could make billions of dollars, some of it paid for by electricity ratepayers, for a project whose public need was always in doubt

and

Change the Federal Energy Regulatory Commission so it has to really look at whether a project before it has an economic purpose.

Sorry to break the news, but Certificates of Public Convenience and Necessity are required from the FERC for all new pipeline routes. And all of the money spent was that of the investors. That is why Dominion pulled out. Both the timeline and the costs were unconstrained and thus incalculable.

I quote from 15 USC 717f: Construction, extension, or abandonment of facilities.

“(e) Granting of certificate of public convenience and necessity
Except in the cases governed by the provisos contained in subsection (c)(1) of this section, a certificate shall be issued to any qualified applicant therefor, authorizing the whole or any part of the operation, sale, service, construction, extension, or acquisition covered by the application, if it is found that the applicant is able and willing properly to do the acts and to perform the service proposed and to conform to the provisions of this chapter and the requirements, rules, and regulations of the Commission thereunder, and that the proposed service, sale, operation, construction, extension, or acquisition, to the extent authorized by the certificate, is or will be required by the present or future public convenience and necessity; otherwise such application shall be denied. The Commission shall have the power to attach to the issuance of the certificate and to the exercise of the rights granted thereunder such reasonable terms and conditions as the public convenience and necessity may require.”

So, it can’t be existing law to which Mr. Galuszka objects.

Atlantic Coast Pipeline LLC applied to FERC on Sept. 18, 2015, to construct and operate the project. It filed an amended proposal six months later which proposed several route changes and additional compression capacity in Buckingham County.

The FERC approved a certificate of public convenience and necessity for the proposed Atlantic Coast interstate natural gas pipeline project on Oct 13, 2017 — 18 months after the receipt of the revised submission.

So, it can’t be a lack of consideration of necessity for the ACP to which Mr. Galuska objects.

In Mr. Galuszka’s Washington Post article which he referenced, he wrote:

“Greg Buppert, a lawyer with the Charlottesville-based Southern Environmental Law Center, which led the legal fight, notes that FERC does not consider whether an entity seeking its approval is in the public interest or has a real market for its products.”

Now Mr. Buppert can say whatever he wishes but that does not make it true. In this case, it is utterly false. If the Post had put an editor on this piece and fact checked it, that statement would not have been included.

FERC’s three commissioners acknowledged the need for more gas in Virginia and North Carolina. Even the dissenting Commissioner noted that more than 90% of the ACP’s capacity was subscribed by public utility customers in the two states.

So, all three acknowledged that there was a market for the gas.

Mr. Galuszka also wrote:

FERC has met few projects it didn’t like. It usually needs just proof of a contract. In the ACP case, that was a contract between ACP and its partners and their own subsidiaries. Does someone smell rotten eggs?

So, the contention is that the investors in a pipeline to bring additional supply to an area of need cannot include the very utilities who plan to sell that gas to their customers. Seriously? That is ridiculous.

Somewhere in this pile of words is the notion that gas utilities would spend $8 billion of their own money for a pipeline to bring additional gas to a region that didn’t need it and in which they thus couldn’t sell it. Equally ridiculous.

I seriously wish that opponents of natural gas would just say that they are opposed to the use of natural gas. That is a simple and true statement.

Saying the FERC regulatory process is either non-existent (see above) or rigged (ditto) — which is it? — because the author doesn’t like its outcome is demonstrably wrong. It is also irrelevant.

What none of the greens mention is that it is utter misuse of the original National Environmental Policy Act of 1970 (NEPA) that blocks not just energy projects like pipelines but any infrastructure project of any scale anywhere in the country with which the greens disagree.

Remember when President Obama reported discovering that there was no such thing as a “shovel ready” project? It was NEPA to which he was referring. His community organizer background did not prepare him for the realities of NEPA.

From Richard A. Epstein in the Wall Street Journal this morning:

“The endless rounds of NEPA reviews led to the abandonment of the Atlantic Coast Pipeline this month before construction could begin.”

“As drafted, NEPA was intended to invite all segments of the public to submit comments to improve decision making. But in 1971, in Calvert Cliffs’ Coordinating Committee v. U.S. Atomic Energy Commission, the U.S. Circuit Court of Appeals for the District of Columbia invited a flood of new litigation by holding that any disappointed party may challenge an agency approval in federal court. Even if the bulk of informed opinion supports a new project, an extreme outlier can sue to stop it. NEPA includes no provision establishing a private right of action, but the practice has become so ingrained that it can’t be undone by regulation.”

It will take a Congressional revision to NEPA to do that. And that is not going to happen in the near future.

So, I beg you greens, spare us the hand wringing and false claims about both the need for more natural gas and the processes of the FERC.

You simply don’t want customers to use natural gas. That is both straightforward and true — and entirely your prerogative in a free country.

Greens can be assured that a FERC approval will be rendered moot by NEPA lawsuits every time they put enough of their billionaires’ money on the line to pay lawyers.

Like in the case of the ACP.

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44 responses to “Atlantic Coast Pipeline Necessity and the FERC

  1. re: ” It will take a Congressional revision to NEPA to do that. And that is not going to happen in the near future.”

    eh – not so fast:

    “The White House finalized its rollback of one of the nation’s bedrock environmental laws Wednesday, with President Trump calling the law the “single biggest obstacle” to major construction projects.

    Critics say the rollback will gut the National Environmental Policy Act (NEPA), which for 50 years has required the government to weigh environmental and community concerns before approving pipelines, highways, drilling permits, new factories or any major action on federal lands.”

    https://thehill.com/policy/energy-environment/507536-trump-finalizes-rollback-of-bedrock-environmental-law-nepa

    Maybe Dominion screwed up with their timing? Surely they knew what Trump was doing, no?

    • Dominion knew exactly what it was doing. President Trump is right that NEPA is the single biggest obstacle to major construction projects and has been since can’t change the fact that federal courts accept NEPA lawsuits from private citizens. That has been true since 1971’s “Calvert Cliffs’ Coordinating Committee v. U.S. Atomic Energy Commission” – a court of appeals decision, not a Supreme Court decision.

      It would take a change to the law or a Supreme Court decision to prohibit private lawsuits that claim to be filed in enforcement of NEPA.

      If they did not claim that basis for their standing, private plaintiffs would have to prove damages to specific clients rather than claim procedural errors on the part of FERC that they claim violate federal law.

      • well, you’re missing the part about “public lands”. NEPA does not apply to private land.

        Dominion either did not know or care… but most land professionals do kow – see below:

        ” The National Environmental Policy Act (NEPA)1 is the principal federal charter for the protection of the environment.2 The legisla-tion commands every federal agency to consider the effect of its proposed actions before authorizing “major Federal actions signif-icantly affecting the quality of the human environment.”3 The NEPA obligation is inherently procedural rather than substan-tive. The statute requires federal agencies to look before they leap, but does not obligate an agency to reach a decision that pro-tects the environment. That procedural mandate plays a significant role in the permit-ting and approval of more natural resources development projects than perhaps any other federal law. It requires prior review and analysis of nearly every proposal to develop oil and gas, coal, and other minerals located on federal lands, and nearly every proposal to develop federal minerals located under fee surface. Land pro-fessionals commonly encounter NEPA in formulating proposals to develop federal minerals, or when development of fee or state minerals requires a federal permit or a federal authorization such as a right-of-way across federal lands. ”

        https://biotech.law.lsu.edu/blog/What-Every-Land-Professional-Should-Know-about-NEPA.pdf

  2. Well Captain. Let’s face two facts. The ACP is dead. Farrell is out as CEO.

  3. Jim S. You miss the point. The law may say that. I am suggesting it me changed. I never suggested anything criminal.

  4. The thing I am focus on, in part is, is the concept of environmental justice.

    In the news today, NY environmentalists suing to force closure of several small relatively new natural gas peaking plants in the City. The enviros claim it is proven that the small, extremely low emission gas plants, which only operate part-time, have caused many COVID cases in the minority community.

    Environmental injustice used to refer to blatant, large amounts of highly toxic, uncontrolled pollution being discharged into waterways and communities. Now anything politically incorrect to the Libs is crime against humanity.

    Interesting to see how this attitude develops. If “all” use of combustion is a crime against humanity, as paraphrased by an environmental activist in the Michael Moore produced Planet of the Humans, then we gotta “head for the hills”. And no pipelines on my new property in the hills, thank you!

  5. Just to point out one thing about NEPA. NEPA does not approve or reject a project.

    All it is – is a law that requires the applicant to fully document the impacts – ONLY to Federal Lands and with respect to the specific Federal agency that administers that land.

    But that’s where companies like Dominion screw up. For instance, they went to the Forest Service to get a permit over land that the Department of Interior administers.

    All the principles knew it. Dominion knew it and so did the Federal Agencies but they all played along basically gambling that no one would notice or challenge it or if they did that Dominion could squash them in the lower courts and/or drain the financial resources of the challengers.

    And apparently, there were several areas where Dominion had not followed the rules.

    And again , no judge would approve or deny the pipeline itself – they were only ruling on whether Dominion followed NEPA and the penalty was not to deny Dominion the ability to proceed but instead force them to go back and do the rules as written.

    If the demand for gas was real – and actually increasing in eastern Virginia – the market was there and still is… for any company that wants to try to supply that market.

    I’m not at all convinced that Williams/Transco will exit – that was their market to start with… as they own most all of the existing infrastructure that supplies it now.

    Make no mistake – Dominion and Transco/Williams were and are competitors in the gas pipeline business and Dominion was trying to expand into that business – in Transco’s existing territory.

    The other question is WHY Dominion as a utility was trying to move into another industry ? Did they want to vertically integrate ?

    One presumes – that Dominion had the backing of their board and investors when they entered into this and it’s no stretch to believe that Farrell pulled the plug. Others did it – investors or the board…

    • Thanks for recognizing the need for the gas. Peter aggressively denies it.

      The great problem is that NEPA was interpreted in 1971 by a federal appeals court to permit private suits for its enforcement. The rest is not relevant.

      If there is enough money from rich greens to support 1000 law suits against a project, then 1000 law suits there will be.

      No company can invest with confidence against such an unbounded threat. And the greens know it.

      Thus the law must be changed or the Supreme Court must overturn 50 years of lower court precedent. The need for gas or anything else to keep the economy going will be damned until that time. Damned is the operative word. Ask President Obama.

  6. re: ” The great problem is that NEPA was interpreted in 1971 by a federal appeals court to permit private suits for its enforcement. The rest is not relevant.”

    public lands.. Jim – we all have standing….

    “If there is enough money from rich greens to support 1000 law suits against a project, then 1000 law suits there will be.”

    ah – but there’s not really enough money in the world so they do have to prioritize…

    “No company can invest with confidence against such an unbounded threat. And the greens know it. Thus the law must be changed or the Supreme Court must overturn 50 years of lower court precedent.”

    Actually they can and they have – again – all the company has to do is document the impacts. No judge denies the project. That decision belongs to the Federal Agency.

    “The need for gas or anything else to keep the economy going will be damned until that time. Damned is the operative word. Ask President Obama.”

    That’s silly and partisan especially when we’re looking at the cheapest gasoline – as well as natural gas in decades.

    here’s the truth and reality:

    ” Despite the high-profile courtroom losses by the Keystone XL and Dakota Access oil pipelines and the cancellation of the Atlantic Coast natural gas project, the oil and gas industry has succeeded in putting tens of thousands of miles of new steel in the ground in recent years. And while green groups appear to be winning the public relations battle around some of the biggest projects, the activists may be losing the smaller skirmishes that are locking in fossil fuel infrastructure for years to come, according to industry analysts.

    “One thing for sure is there is a lot going on in the pipeline world outside of the public attention on shiny objects like Keystone XL, DAPL or Atlantic Coast,” said John Stoody, vice president of government and public relations at trade group Association of Oil Pipe Lines, pointing to government records showing about 10,000 miles of oil pipelines were built since 2015. “While the many have been focused on debating the Atlantic Coast Pipeline, we’ve actually built and have newly operating over the last five years the mileage equivalent of over 18 Atlantic Coast Pipelines.”

    https://www.politico.com/news/2020/07/20/oil-networks-pipelines-374440

    you need to expand your reading list Jim….

    • There is no question that private land owners can sue to prevent damage to their property. Suits are filed in imminent domain cases every day.

      “We all have standing”. We have a republic. We elect governments to represent us in such matters. NEPA, at least as interpreted by one appeals court, makes every man a government official in the protection of public property. Every public road is public property, every public space like the Appalachian trail, not just the huge swaths of publicly owned land in many states.

      That is the problem with NEPA.

      Nearly all of the pipeline infrastructure discussed in the article to which you refer is:
      1. from new sources of supply from fracking to existing pipelines in both traditional and new oil and gas states; and
      2. for new pipelines in oil and gas producer states, including North Dakota and the Appalachians, to support the switch from coal to gas in electricity production;
      not from oil and gas producer sources to retail consumers.

      We don’t have enough gas for our consumption needs here in Southeastern Virginia and Eastern North Carolina. The green guardians have “protected” us from the delivery of that gas from out of state. They consider that a great victory.

      Because, like Peter, the question for them is to how to keep us from obtaining more gas, not needing more to heat our homes, businesses and military bases, cook our food and generate electricity.

      If Peter lived or worked down here, these would not be rhetorical questions for him.

      If we cut off energy supplies to Charlottesville and Albemarle Counties, the homes of Virginia’s most prominent billionaire greens, they would simply pick up and move.

      Regular people don’t have that option.

      • Jim – we have a huge existing pipeline infrastructure in Virginia.

        If we are truly short of gas then the proper way to deal with it is to expand the current corridors.

        I’m not convinced we’re talking about a true public need.

        We seem to have no shortage of gasoline – and it too comes by pipeline.

        The article I shared with you says this:

        ” “One thing for sure is there is a lot going on in the pipeline world outside of the public attention on shiny objects like Keystone XL, DAPL or Atlantic Coast,” said John Stoody, vice president of government and public relations at trade group Association of Oil Pipe Lines, pointing to government records showing about 10,000 miles of oil pipelines were built since 2015. “While the many have been focused on debating the Atlantic Coast Pipeline, we’ve actually built and have newly operating over the last five years the mileage equivalent of over 18 Atlantic Coast Pipelines.”

        that sounds like NEPA is NOT “stopping” MOST pipelines…despite those pesky enviros…

        did you see this:

        ” Mountain Valley to receive new permit to cross Blue Ridge Parkway”

        so these guys did the permit correctly and got it!

        “The Mountain Valley Pipeline will be granted a new permit to cross the Blue Ridge Parkway, the first in a string of federal approvals needed before the natural gas pipeline can be completed.

        In a letter filed Tuesday with the Federal Energy Regulatory Commission, the National Park Service said it intended to issue a right of way permit for the pipeline to pass under the parkway atop Bent Mountain in Roanoke County.

        Construction of that segment of the 303-mile pipeline was completed in January 2019, but Mountain Valley needs the permit to maintain and operate the transmission line.

        Parkway Superintendent J.D. Lee wrote in the letter that the approval was “not a wholly new undertaking,” as the initial permit was suspended for technical reasons at the request of Mountain Valley.

  7. Jim S. You are putting words in my mouth. I never “aggressively” claimed natural gas should not be used at all. The question is how much more.

    • Have you seen the movie “Planet of the Humans”?

      I’ve been told I should watch it.

      • Yes, worth a watch.

      • One note on solar panels. The movie does underrepresent the efficiency of solar panels with a 20-year old field. New panels are 23% efficient, which is 3x that in the movie, but other than that, the statements on consumption are certainly valid. Of course, research and lifestyle changes can make a huge dent in consumption.

        I currently heat my house with a 2015 high efficiency gas furnace replacing one built in 1995. I’d have to do a serious review on consumption, but on the bottom line $ amount drop on the bills, was on the order of 30% in the winter.

        However, my new unit is already OBE with newer units supposedly sucking 98% of the heat into the house.

        I did have one big problem, which I solved with some increased pipe insulation and a sweeping tee cap. My current furnace produces water in the combustion, same as any, but the exhaust temperature is so low that it was freezing in the PVC vent.

        • A furnace from 1995 should have an AFUE of 80%. Therefore your savings from replacing it with a more efficient furnace (like a 100% AFUE furnace that doesn’t exist) will never be more than 20%.

          • Okay, I believe that. Since it was hauled away by the new system installers, unlike most the junk aka “spare parts”, in my garage, I couldn’t look up it’s efficiency. Of course, $ to cuft, may or may not be linear.

        • The Federal energy standards in 1995 (I don’t recall when they took effect) required a minimum of 80% AFUE for furnaces and 10 SEER for air conditioners. These 80% AFUE furnaces typically had either hot surface or spark ignition (no standing pilot) and inshot burners (vs ribbon burners) firing into a tubular heat exchanger with a draft inducer fan.

          It is possible that, in 1995, an older unit that didn’t meet the Federal energy standards could have been installed–the Federal standards applied to new production units on the date of implementation–those made before could still be sold. But this is unlikely (at least with a halfway-reputable HVAC contractor…)

          • Wow! Way more than I asked for. OTOH, while I did see some improvement, large in my opinion, the weather could have been the big factor. Please, don’t go digging on the NOAA site.

            I can tell you the furnace was a 120k BTU, built by a company in Missouri that normally made furnaces for trailers. They made a run at the housing market with ONE, count it, one, home unit. When I moved into the house, winter, the ignition ribbon broke. The local supply store had two of them, so I bought them both. Threw one away a couple of years ago.

            The real misery with the unit was the vanes on the squirrel cage broke loose and rattled to drive a person crazy. I pulled it, got the part number and discovered the part was a one-off too. Wound up with replacing the whole blower with one that most closely matched the cu.ft. flow at both high and low speed.

            Unfortunately, my replacement (2013 btw, not 2015) is a POS York. 18seer ac, and furnace. Love the furnace. The ac unit sucks.

            I understand they have a 21 seer unit now, and I’m contemplating going to a Carrier heat pump with the gas as emergency heat.

    • Peter, I was referring to the need for the gas from the ACP. You have been denying that since you started writing about this subject. I think I made my point.

  8. All those applauding the demise of ACP would do well to look beyond personal left /right, liberal/conservative ideologies and remember that the very devices they are using to write on this blog would not be possible without fossil fuels. Industries manufacturing a majority of materials used in all modern devices are, and will remain, dependent on high heat sources which cannot be met by renewables. So yes, if less affordable natural gas is available, industries manufacturing components for our devices, cars, boats and planes, seeking to expand or locate in Virginia will simply look elsewhere. Sadly, there are too many Virginians that celebrate the demise of such industries and jobs that come with them.

    • If combustion is unethical, then we cannot import anything from China that is made with combustion, which is everything in our house including the solar panels, and with much less eco regulation than we have.

  9. There actually is such a thing as a solar furnace:

    A solar furnace is a structure that uses concentrated solar power to produce high temperatures, usually for industry. Parabolic mirrors or heliostats concentrate light (Insolation) onto a focal point. The temperature at the focal point may reach 3,500 °C (6,330 °F), and this heat can be used to generate electricity, melt steel, make hydrogen fuel or nanomaterials.

    the anti solar people cite how birds are killed by solar all the time – but it’s not panels – it’s these solar furnaces!

  10. Steve – sorry, that website is not very credible guy. They’re climate deniers, pro fossil-fuels, and pretty much against any/all renewables

    The concept of a solar furnace is very real. Research is ongoing but the claim that they cannot generate high temps is clearly wrong – they can and do generate very high temperatures.

    There are quite a few credible sources including this one:

    Solar Furnace
    Solar furnaces have been used for studies on temperature resistant materials for atomic reactors, aircraft engines and guided missiles.

    https://www.sciencedirect.com/topics/engineering/solar-furnace

  11. Several times Mr. Sherlock refers to the “billionaires” supporting the lawyers who filed the suits. I detect a great deal of frustration and consternation that environmentalists finally have some serious money on their side.

    In the tirade against the billionaires, there is no mention of the many private landowners, many of them relatively small, who simply did not want a huge pipeline that would benefit primarily private investors going through their property and who spent years and lots of their own money fighting against it. It has always puzzled me how conservatives, who are supposed to be such champions of the rights of private property, were not outraged by this taking of private property for private gain.

  12. One could argue that eminent domain for private gain is the mother of all COPN!

  13. Capt. Sherlock,
    You seem to be badly confused by environmental laws and regulation so here’s some from last November in the trade journal UtilityDive:

    The following is a contributed article by Sue Tierney, a Senior Advisor at Analysis Group, former Assistant Secretary for Policy at the U.S. Department of Energy, and former environmental cabinet officer and public utility commissioner in Massachusetts.

    Since adopting its natural gas pipeline Policy Statement 20 years ago, the Federal Energy Regulatory Commission has approved 474 gas pipeline projects, representing 23,773 new miles of pipeline around the nation. It has rejected only two projects.”

    Let’s see Jim. Only two projects rejected? I know you can count but it is not a lot,

    • Peter, Your piece in this space “made two claims the greens offer endlessly trying to achieve what I call truth by repeated assertion:” Those two claims were:
      “1. The Federal Energy Regulatory Commission (FERC) either did not review or did not review properly the wisdom and necessity for natural gas pipeline projects in general and the Atlantic Coast Pipeline (ACP) in particular.
      2. That if it had done so, the FERC would have discovered that there is no market for additional natural gas in the markets to which the pipelines would have brought it.”

      I gave evidence of the irrefutable falsity of those two claims.

      The FERC did its job under the law and granted a certificate of public convenience and necessity to the ACP after 18 months. That process is defined in law and regulation. You can disagree with the outcome of that review, but you can’t claim, as you did, that it didn’t happen and that the FERC did not rule on the necessity for the gas in the ACP’s end markets..

      All Commissioners, including the one who voted against it, agreed that we don’t have enough gas for our consumption needs here in Southeastern Virginia and Eastern North Carolina.

      Your claims that the ACP was a project “whose public need was always in doubt” is thus a product of your imagination.

      Your recommendation to “Change the Federal Energy Regulatory Commission so it has to really look at whether a project before it has an economic purpose.” asks for an outcome that is already guaranteed in the law.

      When, having provided the evidence, I wrote: “I hope this is the last time we will need to read about them” I was unrealistic. It took about two minutes for them to come roaring back.

      Rail against the FERC commissioners if you wish. But be careful. The FERC is composed of up to five commissioners who are appointed by the President of the United States with the advice and consent of the Senate.

      Commissioners serve five-year terms, and have an equal vote on regulatory matters. No later than 2013, President Obama had appointed all of them. All of them. So is it just possible that they rule on the law and the facts presented when they make decisions? Or perhaps Barack Obama was a tool of the carbon conspiracy. Or he made the mistake of appointing FERC commissioners who were actual experts in energy production, distribution and markets. He must not have known that you and Larry were available.

      Rail against imminent domain if you wish. That is a worthy public debate, but one that has two sides, and whose application to individual cases is worked out in court.

      If I were a landowner who did not want my property taken for public purposes, I would sue as well. Certainly the value of land and improvements for reimbursement purposes can be the subject for contentious suits. I might win, I might lose, but I would have my day in court.

      The other side of that is that few public projects that involve the necessity of buying or buying access to private property could be undertaken without imminent domain. One owner would be in a position to extort or stop any such project.

      So should we be frozen in time and space in the development of projects to fulfill public needs for energy (or airports or roads or bridges or rail or low cost or public housing)? I hope not. What say you?

      As for preferred routes for natural gas pipelines and the viability of solar furnaces, I will leave those discussions to energy experts like you and Larry. I’m surprised that Dominion didn’t hire you early on since you did not have seats on the FERC.

      The more honest green religious organizations like 350.0rg and another famed energy expert, Alexandria Ocasio-Cortez, oppose the development, transport and use of all fossil fuel energy rather than dithering on the edges of permitting. Join them. Proudly proclaim your position.

      Just spare us your analysis of the energy needs of Hampton Roads and complaints about Barack Obama’s FERC commissioners.

      • re: ” As for preferred routes for natural gas pipelines and the viability of solar furnaces”

        don’t know much about solar furnaces other than the fact that they do exist and they do reach very high temperatures and do so without gas.

        in terms of routes for gas pipelines. It’s pretty simple. Existing routes are easy to “buy” and gain additional approvals for that greenfield routes especially when going over land you do not own and depend on the government to help you get. Rent Seeking.

        Jim – you have an interesting take on eminent domain from a person perspective all the while supporting Dominion’s “right” to take it. Interesting – you picking DOminion over OTHER property owners but would object yourself?

        That sounds NIMBY.

        • I support the government’s right to buy private property under eminent domain law for a public purpose.

          I and any other property owner has the right to fight an eminent domain decision in court, either to contest the valuation of the property being bought for public purpose or to contest that the taking was for a truly public purpose or to offer less intrusive solutions than the purchase of the property in question.

          I support their right to do so. I might do it myself. But none of those actions challenges the government’s right of eminent domain, but rather assert flaws in its execution of that right.

          As for the “pretty simple” part of your assertion.

          You claim that Dominion and its partners, including my local provider Virginia Natural Gas, willingly paid more for ACP than using a less expensive and less risky solution of your design. Since some of the $8 billion wasted on the ACP was their money, how do you assess the end users like Virginia Natural Gas’ (VNG) reasons for the decision not to use the “simple” alternative supply route?

          I understand from a knowledgeable internal source that VNG sees no good natural gas supply alternative to the ACP. You and I can assume VNG has explored all of the alternatives. They are looking at the possibility of capturing methane from hog farms. Apparently that source has huge potential and is not something I knew was feasible at that scale, but VNG faces the considerable risk that environmental suits – risk of flooding – against hog farmers in southeastern Virginia and eastern North Carolina will shut them down after a major investment in capturing the methane.

          So I recommend you reconsider your assertion that you have a better, “simple” idea. It makes you sound unserious.

          • so if property owners were opposed to the use of eminent domain to take their property and they used any/all legal ways to stop it, you’d do the same?

            In terms of VNG and east Virginia, there are already existing pipelines across Virginia to there. There’s actually a huge pipeline from the Gulf up through the middle of Virginia with tertiary lines east:

            ?crop=1438%2C809%2C34%2C0&resize=1120%2C630&order=crop%2Cresize

            Dominion was going to duplicate some of the infrastructure in order to compete with Transco/columbia who already supplies VNG.

            Any of those companies could expand existing or build new to increase capacity but the point is this is a private venture serving a market where price is set by supply/demand. Why should private property owners have their land taken for one of the for-profit investors?

            No Conservative should support this – it’s really Crony Capitalism on steroids.

            If a solar farm company wanted to condemn land for their project to serve a industry “demand”, I bet you would oppose it.

  14. Jim S. Sorry you seem to be upset but I am writing opinion here. I did it for the Post’s online Opinion section and it should be in print tomorrow in the Local Opinions section. If you disagree, write a letter or comment as you have. I actually talked to a number of people impacted by the ACP and got their input. This is not a piece about the gas needs of the U.S. Navy. If they are indeed that dire, one would think a new link to Transco or Columbia would be made. Why build a 600 mile long project from West Virginia? I have been covering this project since it began. I started covering VEPCO – Dominion since about 1974. Don’t take this personally, Peter

    • Peter, I am not challenging your opinion, I am challenging your facts.

      You continue to repeat that the gas in not needed in Hampton Roads. Your “one would think” opinion on an alternative route is not supported by my conversations with a senior executive of VNG who is a friend. He has no idea where they will get gas to support current customers, much less growth in Hampton Roads.

      To refresh your memory, here is an original story in the RTD from Mar 16, 2016. That was a year and a half before the FERC certification was issued. Opponents had plenty of time to make their case.
      “The need for this project is urgent; to put it bluntly, our region’s natural gas transportation system has reached a tipping point,” write the legislators — 20 Republicans and 13 Democrats.

      “The pipelines serving Hampton Roads are fully subscribed. Without new infrastructure, there is no way to meet our region’s rising demand for natural gas.”

      “And without new infrastructure, the abundant, economical supplies of natural gas being produced just a few hundred miles away will remain virtually inaccessible for our communities, crippling our prospects for economic growth.”

      “The lawmakers say they believe the Atlantic Coast Pipeline “would dramatically change that situation and be a major step forward in promoting the economic and environmental health of our region and of the whole commonwealth.”

      “They also say it would provide operators of electric power stations in Virginia with “much better access to this clean-burning fuel and in turn help them comply with the carbon restrictions in the U.S. Environmental Protection Agency’s Clean Power Plan.”

      “The Federal Energy Regulatory Commission is expected to decide later this year whether to certify the need for the pipeline and allow eminent domain to acquire rights of way along the more than 550-mile route from West Virginia to southeastern Virginia and North Carolina.”

      “Pipeline developers, led by Dominion, the Richmond-based energy company, say the project will bring benefits in increased local taxes and jobs and will bring lower electricity costs to consumers in Virginia and North Carolina.”

      “Opponents say the proposed $5 billion project would cost more than it is worth to localities in its path in western and central Virginia. They say it would damage property values, ecological resources, tourism and small business development in Highland, Augusta, Nelson and Buckingham counties.”

      That was always the real debate. The opponents who did not want it in their counties and their allies that don’t want additional fossil fuel energy infrastructure anywhere ever in Virginia recently won. The huge Democratic donors who funded the opposition live in Albemarle County, right next to the proposed path.

      Because there is no such thing as a limit to lawsuits, infinite delays and their resultant costs are possible even if the opposition loses every case, as they did here. Dominion folded. Mission accomplished.

      But you are right, your continued insistence that we don’t need the gas here drives me nuts, because it is false on its face.

      You wrote: “I actually talked to a number of people impacted by the ACP and got their input.”

      Since you “have been covering this project since it began”, provide all of us the link to the part of your coverage in which you reported on interviews with either VNG or any one of the 33 members of the Hampton Roads GA delegation to get their views.

      To anticipate your response, no, the 33 members were not “bought” by Dominion and they did not decide to lie enmasse. The Democrats in that group get more money from environmental issue donors than from Dominion.

      We still don’t have the gas. Or know where we are going to get it.

  15. interesting article:

    ” America is awash with natural gas, and it’s about to get worse”
    1/19/2020

    excerpts:

    But the dark side of the boom is increasingly difficult to ignore. Shale drillers are extracting so much gas that it’s overwhelming demand.

    Prices briefly dipped below $2 /MMbtu on Friday for the first time since 2016. At that level, U.S. producers simply don’t make money. It’s forcing a wave of multibillion-dollar writedowns, layoffs and spending cuts.
    Even exports of liquefied natural gas provide little relief, as the international market is also oversupplied.

    Evidence of corporate distress is mounting. Chesapeake Energy Corp., once in the vanguard of U.S. frackers, is unprofitable and struggling with more than $9 billion of debt. It warned in November it may go bust.

    Even the global energy giants aren’t immune. Chevron Corp. said last month it expects a writedown of more than $11 billion, more that half of that attributable to its Appalachian gas assets.

    https://www.worldoil.com/news/2020/1/17/america-is-awash-with-natural-gas-and-it-s-about-to-get-worse

  16. Mr. Sherlock,

    I appreciate your interest in having adequate supplies of energy in Virginia, especially in Southeast Virginia, which appears to be where you live.

    I have worked for electric & gas utilities in other states and led a department that was responsible for obtaining approvals for major utility projects from state and federal agencies.

    Each agency was responsible for following the NEPA guidelines in the approval of the projects. I followed the FERC process regarding the ACP very carefully. The process used by FERC to certify the public convenience and necessity of the ACP was far less rigorous than any other permitting process at either the state or federal level, with which I had experience.

    The foundation of most other agencies’ permitting processes begins with an evaluation of the need for the project. FERC’s own guidelines regarding how they would review an application for a new interstate gas pipeline include numerous considerations for assessing the need for the pipeline. The guidelines mention that proof of actual market demand and the ability of existing pipelines to serve the need for additional supply are important considerations in evaluating whether a new pipeline is needed.

    Unfortunately, FERC did not follow its guidelines in assessing the need for the ACP. For the past 20 years FERC has relied solely on the existence of contracts as the proof of need. Pipeline developers quickly learned that FERC made no independent evaluation of need, and they often gamed the system by signing up their own subsidiaries as shippers on the pipeline. That was the case with the ACP.

    Although utility subsidiaries of Dominion Energy and Duke Energy signed up as shippers on the ACP, they did not need the new pipeline, nor was it a good deal for their customers.

    The Virginia State Corporation Commission (SCC) ruled last year that Dominion’s utility has reserved sufficient long-term pipeline capacity (without the ACP) to reliably operate all of its gas-fired power plants. Dominion is unlikely to build any new ones. Two new peaking units still on the drawing boards would use other pipelines, and they probably won’t be the most cost-effective options anyway.

    Duke has canceled several of the units that might have needed the ACP. Any remaining new units that might need more gas supply can easily obtain it from the expanded capacity in the Transco system that has reliably served nearly all of North Carolina’s needs for decades.

    The report submitted with the application to support the “public convenience” of the ACP failed to consider the cost of using the pipeline. Instead of the $377 million in annual savings resulting from the flawed assumptions in the study, the ACP would add $30 billion to customers’ energy costs over the first 20 years of its operation.

    None of the voided permits that contributed to the demise of the ACP were related to NEPA issues. FERC’s failures to follow NEPA requirements were scheduled to be addressed in federal court this fall. This was to have been the first occasion where FERC’s process for permitting new pipelines would undergo court review. That will no longer occur, now that the project has been canceled – probably much to the relief of the Commission.

    NEPA requires that alternatives to the project be evaluated and their costs and environmental impacts compared with the proposed project. FERC failed to do this. If they had, it would have been clear that projects approved by FERC prior to certifying the ACP would have provided more pipeline capacity than the ACP at a significantly lower cost, with far less environmental disruption.

    FERC Commissioner LaFleur noted this in her dissent against the ACP (and MVP), saying that the project was unnecessary because it served a similar market that to that served by projects that FERC had already approved. If FERC had properly followed the requirements of federal law (NEPA) they would have clearly identified that they were permitting multiple pipelines designed to serve the same market.

    I know you are interested in having adequate energy supplies to Southeast Virginia. In 2019, Virginia Natural Gas provided information to the SCC that it has a surplus of pipeline capacity and is selling some of it to others. During extreme weather, interruptible customers have been curtailed to favor customers who have paid higher rates for firm service.

    It appears that economic development in the region is still focused on the 20th-century notion that natural gas is required for commercial and industrial expansion. Typically, very few businesses have the need for high-temperature process heat that gas is particularly well-suited to provide. There are other options that might meet the needs you mention without the need for more gas supply. But that’s a whole new conversation.

    The ACP added $6 billion over 40 years to the energy costs (not including the cost of the gas itself) for VNG customers. Such a huge increase in energy costs would not have been a boon to economic development in the region. There are other ways to get you where you want to go without the ACP.

    • First, 3:28 AM. Impressive dedication. I request more information on your key claims:

      First, did you consult for the opponents of the ACP?

      Now for the RFIs:

      “The report submitted with the application to support the “public convenience” of the ACP failed to consider the cost of using the pipeline. Instead of the $377 million in annual savings resulting from the flawed assumptions in the study, the ACP would add $30 billion to customers’ energy costs over the first 20 years of its operation.” Provide the reference.

      “NEPA requires that alternatives to the project be evaluated and their costs and environmental impacts compared with the proposed project. FERC failed to do this.” Provide the reference.

      “In 2019, Virginia Natural Gas provided information to the SCC that it has a surplus of pipeline capacity and is selling some of it to others. During extreme weather, interruptible customers have been curtailed to favor customers who have paid higher rates for firm service.” Provide the reference.

      “The ACP added $6 billion over 40 years to the energy costs (not including the cost of the gas itself) for VNG customers. Such a huge increase in energy costs would not have been a boon to economic development in the region. There are other ways to get you where you want to go without the ACP.” Provide the reference.

      Finally, any theories why the entire Hampton Roads delegation to the General Assembly, Republicans and Democrats alike, supported the ACP? Thanks.

  17. To tack on to this thread because it’s a bit newer and the article tangentially-related – with respect to Dominion and CEO Farrell:

    (from FLS – but published originally by RTD) Jul 31, 2020 :

    ” Dominion Energy is getting a new CEO, with Thomas F. Farrell transitioning to a new role as executive chair effective Oct. 1, the energy giant announced Friday.

    Farrell will continue to serve as the chairman of Dominion’s board of directors, according to a news release. Robert M. Blue, Dominion’s executive vice president and co-chief operating officer, will also start Oct. 1 as the company’s president and CEO.

    Blue will report to Farrell.

    “One of my goals as CEO was to build a strong leadership team and a long-term succession plan,” Farrell, who was promoted to president and CEO in 2006 after joining the company in 1995, said in a statement. “Today’s announcement is the next step in that process.”

    So this does not sound like a demotion at all for Farrell…

  18. I don’t interpret the reorganization at Dominion as a bad reflection on Mr. Farrell. Utilities typically have policies that limit a President or CEO serving in that capacity beyond a certain age, usually the national retirement age – which is now 66 (Mr. Farrell’s current age). This transition has been in the making for some time. He is still the top guy and will continue to direct the strategy of the company. He remains perhaps the most powerful non-elected person in Virginia (and you can probably drop the non-elected part).

    From a shareholder’s perspective, Mr. Farrell has been very successful in his tenure as CEO. He led much of the transition of Dominion Energy from having only 40% of its revenues from regulated activities 20 years ago to over 95% today.

    This occurred during a time of relatively flat growth in energy demand which challenged the utility’s ability to continue to contribute to increased dividends for shareholders. Mr. Farrell was able to continually get bills passed by the General Assembly that considerably increased utility revenues despite very modest increases in demand.

    The bone I have to pick with this strategy is that it upset the balance that is supposed exist between shareholder interests and customer interests that is in exchange for the granting of monopoly power.

    A variety of bills have passed that have reduced the ability of the state regulator to enforce this balance. This has been bad news for Virginia families and businesses for several decades, and will continue to add tens and tens of billions to our energy costs without providing a benefit to customers in return. This is far different from what is happening in other states and will reduce Virginia’s economic competitiveness.

    I am also concerned that continuing to give customers less reason to do business with them each year will eventually harm the utility that depends on building more to earn more, whether needed or not. Having a distorted way of regulating our biggest utility is harmful to everyone.

  19. Jim S.,

    In response to your request for more information and references:

    1. The ACP drastically raises energy costs rather than saving money:

    The purported savings from the ACP was provided by a consultant hired by Dominion. The report “The Economic Impacts of the Atlantic Coast Pipeline, ICF International, February 9, 2015” was included with the application to FERC.

    The analysis was deeply flawed. It compared the price differential at Dominion South in West Virginia (the production zone used by the ACP) with the price in Louisiana. The study assumed the lower price that occurred as a result an anomalous weather situation that lasted less than 10 days in 2014 would represent what would be experienced during the first 20 years of ACP operation. The spurious savings value was then run through a magic economic multiplier to come up with $377 million in annual savings.

    A surplus of pipelines now exists to takeaway Appalachian Basin gas to markets throughout the nation. For several years, prices in West Virginia have been roughly equal to supply zones in Pennsylvania, which also serve Virginia. Differences in delivered gas prices now depend mostly on differences in the cost of pipeline transportation.

    On page 9, the report concluded that the ACP would save $1.61/Dth “on average by transporting Appalachian Basin gas on the ACP – far exceeding the proposed transportation rate on the pipeline.” The company conducting the study is an experienced industry consultant and should have known that the published rate for transportation on the ACP (including the supply header) was $1.88/Dth, well above even the questionable savings in gas price.

    Based on increases in the cost of the ACP to $7.8 billion (“In face of litigation, Dominion reiterates Atlantic Coast Pipeline timeline, cost estimate,” Jim Magill, S&P Global/Platts, November 1, 2019) the cost of transportation using the ACP has risen to $2.88 /Dth (based on extrapolating the 53% increase in price from the value used to establish the original published rate).

    The most expensive pipeline, built in 2015, currently supplying Dominion gas-fired plants costs $.53 /Dth – over five times less expensive than transporting the gas with the ACP. Older pipelines supplying other units in Dominion’s fleet are even less expensive to use. Gas is purchased separately.

    The total of the pipeline reservations (1.44 million Dth/d) by all of the shippers on the ACP multiplied times the rate of $2.88 /Dth, yields a total cost of $30.24 billion over the term of the 20-year contracts with the ACP. Contract costs must be paid in full by each shipper regardless of how much of their reservation is actually used.

    Owners of the ACP planned to transfer the costs and risks of the pipeline to the customers of their utility subsidiaries, even though the ACP was unnecessary to provide continued reliable supplies of gas to those utilities and cheaper sources of gas supply were readily available, if needed.

    2. NEPA requirements:

    The National Environmental Policy Act (NEPA) requires a lead federal agency to evaluate the “no action” alternative as well as reasonable alternatives to the proposed action, including those not within the normal jurisdiction of the lead agency. (Department of Energy, National Environmental Policy Act Guidelines, http://energy.gov/sites/prod/files/NEPA-40CFR1500_1508.pdf)

    The purpose of a new pipeline is to provide energy, in the form of natural gas, to supply a market that is under-supplied for the foreseeable future or to provide the necessary energy in a way that is cheaper or less environmentally disruptive than alternatives.

    The “No Action” and other alternatives are dismissed out of hand by FERC for the ACP because they defined the purpose of the project to be a pipeline delivering gas from West Virginia to the market area in Virginia and North Carolina. Essentially, any option that wasn’t the ACP was excluded from serious consideration. This avoided consideration of expansions to existing pipelines that were in line for FERC approval before the ACP that would have provided more capacity than the ACP, at a lower cost, and with less environmental damage. This fails to meet the requirements of NEPA for environmental reasons and the Natural Gas Act because consumer interests are ignored.

    3. SCC Fuel Factor Hearing:

    In its 2019 Order establishing the Fuel Factor for Dominion Energy Virginia, the Commission stated that Dominion’s portfolio of pipeline capacity reservations “is reasonably sized for the size of its generation fleet.” (ORDER ESTABLISHING 2019-2020 FUEL FACTOR, Virginia Electric and Power Company, Case No. PUR-2019-00070, August 15, 2019)

    In testimony at the 2019 Fuel Factor hearing, witness Lander stated that “25% of its [Dominion’s] total used capacity on the Transco system . . . went to uses other than Company power plants.” Mr. Lander went on to say “I conclude that the company has ample pipeline capacity to serve additional power generation should that be necessary” and the utility “should not require any additional pipeline capacity to serve the needs of its ratepayers for the foreseeable future.” (Testimony of Gregory M. Lander, June 19, 2019, Case No. PUR-2019-00070, State Corporation Commission)

    I could not find the VNG-SCC document that I was looking for.

    Excerpts from “No, cold wave doesn’t show need for pipeline,” Roanoke Times, February 7, 2018

    Dominion Energy recently claimed — in several news stories and in an op-ed that ran in the January 15 Roanoke Times (“Extreme cold shows need for new pipelines”) — that the “recent cold spell demonstrated a need for new pipeline infrastructure in Virginia.” This misrepresents what really happened and proposes a solution that is wholly unnecessary and very expensive for the people of Virginia.

    Dominion is using an isolated situation to persuade families, businesses and people on fixed incomes to support a new pipeline that would cause electric and gas consumers throughout the state to pay more for energy every single day of the year. This is not the path to more jobs or greater prosperity.

    Dominion made it sound as if we had gas shortages throughout Virginia. What really happened was that 10 industrial customers of Virginia Natural Gas volunteered to cut back on some of their gas usage in exchange for lower rates.

    Customers sign up for interruptible rates because it allows them to purchase gas at lower costs throughout the year. They have organized their operations knowing that on occasion they might have to curtail their usage during times of extreme weather to provide supplies for firm customers that are willing to pay higher prices for uninterrupted service.

    There are some constraints getting the abundant supply of gas that is available elsewhere in Virginia into the Hampton Roads region.

    4. VNG owed ACP $6 billion over 40 years:

    This calculation is based on the rate of $2.88 /Dth for transportation on the ACP assuming its final cost is $7.8 billion. It is multiplied times the 155,000 Dth/d capacity reservation that VNG had with the ACP. I expressed it as a 40-year cost (2 times $3.25 billion) because a pipeline is typically used at least that long.

    My intention was to compare it with what it might cost VNG to build a pipeline for its own needs if the ACP was not built. Transco built a 100-mile pipeline to deliver 520,000 Dth/d to Dominion’s new power plants in Southside Virginia in 2015 for less than $500 million. The Transco Southside pipeline delivers more than three times the capacity that VNG would have received from the ACP. Let’s say VNG could build a new source of supply connecting over existing right-of-way to either Transco or Columbia Gas. A 200-300 mile new segment of pipeline might be added to provide the same capacity at a cost of $500-$750 million – with the possibility of increased capacity by adding more compression. This is a much better deal than paying someone else over $3 billion for just 20 years of service. With exposure to rate increases on a pipeline that you don’t own.

    VNG did a poor job of proposing a new pipeline in its recent application to the SCC for the Header Improvement Project. The project was built for two main customers: C4GT a merchant generator that was approved for construction more than three years ago that has failed to receive financing during times that were much more favorable than what exist today, and Dominion (VPSE) which asked for service to a power plant that it is has not asked permission to build and might not get approved since it probably won’t be the most cost-effective alternative.

    I don’t think it is prudent for a community to stake its economic future on natural gas. Dominion has projected in its 2020 Integrated Resource Plan that gas prices in 2030 will be over three times higher than they are today. The gas market is in disarray. The shale gas industry in aggregate has lost billions since it began over ten years ago. Many producers are going bankrupt. The industry will consolidate and reduce production to come in line with the reduced demand and prices will rise.

    The most economically competitive thing we can do is to reduce our energy use. This will create long-term jobs and make our businesses more competitive in the U.S. and abroad. Most businesses just need space heating and cooling and lighting. That can be done more economically electrically, especially with some of the new technologies. Converting existing gas users over to those methods could free up gas supply in the southeast for those industries that really need it. The Department of Defense has already embarked on several money saving projects (NAS Oceana for example).

    This is a much cheaper path than spending billions to add more gas supply that will only increase in price. If Southeast Virginia wants to be more competitive they need to blaze a new trail. Building a 21st-century economy with last century’s technology will not turn out well.

    4. Support for the ACP

    Dominion has spread its political contributions over both parties. Many leading legislators have built successful careers by supporting Dominion’s initiatives. Dominion created a compelling narrative about the necessity for the ACP and its potential cost savings. But the truth finally caught up with it.

    We need to get what’s good for Dominion back in alignment with what’s good for Virginians.

    Concerned, influential people such as you will be crucial to that process.

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